Dave, a Fintech App, Accused of Misleading Customers in Federal Lawsuit

Fintech App Dave Embroiled in Legal Battle Over Misleading Practices

The US Department of Justice (DOJ) has filed an amended complaint against fintech app Dave, accusing the company of misleading customers about potential cash advances and hidden fees.

The Controversy

At a time when family finances can be particularly challenging, the Justice Department is taking action against a personal finance app that has been accused of exploiting consumers’ vulnerability. Fintech app Dave and its CEO, Jason Wilk, are facing a scathing amended complaint that alleges the company made false promises to financially struggling consumers and charged them hidden fees.

The Allegations

The DOJ claims that Dave lured users with promises of cash advances "up to $500," but many users received much smaller amounts or nothing at all. The complaint also alleges that users were often charged "express fees" for instant access to funds and "tips" that Dave deducted without clear user consent.

The Accusations Go Deeper

The complaint also accuses Dave of falsely claiming that user tips would fund meals for needy children, with the company displaying heartwarming visuals of cartoon kids and healthy meals. However, the DOJ alleges that only a small fraction of the money actually went to charity.

The Response from Dave

In response to the complaint, Dave has announced a new fee structure, eliminating tips and express fees. The changes apply to new customers as of December 4, with existing users able to opt into the new plan. Dave maintains that many of the allegations are inaccurate and plans to fight them in court.

The Impact on Consumers

The FTC estimates that Dave earned over $149 million from tips alone between 2022 and mid-2024. The Justice Department is seeking civil penalties, refunds for consumers, and a permanent injunction to stop similar practices in the future.

Get Involved

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